Financial Accounting MCQ on Accounting Standards - MCQ Questions

1. Which of the following is not a duty of the International Financial Reporting Standard (IFRS)
interpretations Committee?
a. To interpret the application of IFRS
b. To work directly with national standard setters to bring about convergence with IFRS
c. To provide guidance on financial reporting issues not specifically addressed in IFRSs
d. To publish draft interpretations for public comment

2. The process for developing an IFRS involves a number of stages. Following receipt and review of
comments on a Discussion Paper, what will be the next step undertaken by the IASB?
a. Publication of an Exposure Draft
b. Establishment of an Advisory Committee
c. Consultation with the Advisory Committee
d. Issue a final IFRS

3. Which one of the following would be recognized as an investment property under IAS40 in the
consolidated financial statements of ReyesCo?
a. A property intended for sale in the ordinary course of business
b. A property being constructed for a customer
c. A property held by ReyesCo as a right-of-use asset and leased out under a six-month lease
d. A property owned by ReyesCo and leased out to a subsidiary

4. ReyesCo is developing a new product and expects to be able to capitalize the costs. Which one of
the following would preclude capitalization of the costs?
a. Development of the product is not yet complete
b. No patent has yet been registered in respect of the product
c. No sales contracts have yet been signed in relation to the product
d. It has not been possible to reliably allocate costs to development of the product

5. IAS 1 — Presentation of Financial Statements

What is the primary concern of IAS 1?
a. Leases
b. Insurance Contracts
c. Presentation of Financial Statements
d. Accounting Policies and Errors

6. Which of these is NOT a requirement by IAS 1 for financial statements?

a. Statement of profit or loss
b. Statement of lease agreements
c. Statement of cash flows
d. Statement of financial position
Answer: b

The amendments to IAS 1 are effective for reporting periods beginning on or after:
a) January 1, 2021
b) January 1, 2022
c) January 1, 2023
d) January 1, 2024

Answer: d

IAS 8 — Accounting Policies, Changes in Accounting Estimates and Errors

IAS 8 provides guidance on:

a) Recognizing leases
b) Presenting insurance contracts
c) Reflecting corrections of prior period errors
d) Developing lessee accounting models

Answer: c

Changes in accounting estimates under IAS 8 are generally accounted for on a:

a) Retrospective basis
b) Prospective basis
c) Current basis
d) Non-current basis

Answer: b

IFRS 16 — Leases

The standard IFRS 16 primarily provides details about:

a) Insurance contracts
b) Presentation of Financial Statements
c) Accounting Policies and Errors
d) Recognizing, measuring, and presenting leases

Answer: d

What exception is provided in IFRS 16 regarding the recognition of assets and liabilities for
leases?
a) If the underlying asset has a high value
b) If the lease term is more than 12 months
c) If the underlying asset has a low value
d) None of the above
Answer: c

Lessor accounting in IFRS 16:

a) Has changed significantly from IAS 17
b) Remains largely unchanged from IAS 17
c) Now includes a double lessee model
d) None of the above

Answer: b

IFRS 17 — Insurance Contracts

The main goal of IFRS 17 is to:

a) Set out requirements for financial statements
b) Provide relevant info representing insurance contracts
c) Highlight errors in accounting policies
d) Define lease agreements

Answer: b

The amendments for IFRS 17 are effective for annual reporting periods beginning on or after:
a) January 1, 2021
b) January 1, 2022
c) January 1, 2023
d) January 1, 2024

Answer: c

The IASB has deferred the effective date of IFRS 17 to:

a) January 1, 2019
b) January 1, 2020
c) January 1, 2021
d) January 1, 2022
Answer: d

When were the amendments to IAS 8 effective?

a) January 1, 2011
b) January 1, 2019
c) January 1, 2023
d) January 1, 2024
Answer: c

Which standard is applied in selecting and applying accounting policies?

a) IFRS 16
b) IFRS 17
c) IAS 1
d) IAS 8
Answer: d

What is retained in IFRS 16 from IAS 17?

a) Single lessee accounting model
b) Distinction between operating and finance leases
c) Both a and b
d) None of the above
Answer: b

The IASB has also published an amendment to defer the fixed expiry date of IFRS 9 to:
a) January 1, 2021
b) January 1, 2022
c) January 1, 2023
d) January 1, 2024
Answer: c

The overarching concepts of IAS 1 include all EXCEPT:

a) Going concern
b) Accrual basis of accounting
c) Lessee accounting model
d) Current/non-current distinction
Answer: c

IAS 8 requires compliance with any specific:

a) Lease
b) Insurance contract
c) IFRS applying to a transaction, event, or condition
d) Financial presentation model
Answer: c

Which standard specifically deals with insurance contracts?

a) IAS 1
b) IAS 8
c) IFRS 16
d) IFRS 17
Answer: d

IFRS 16's amendments are effective for annual reporting periods beginning on or after:
a) January 1, 2019
b) January 1, 2020
c) January 1, 2023
d) January 1, 2024
Answer: d

Which standard sets out the overall requirements for financial statements?
a) IFRS 16
b) IFRS 17
c) IAS 1
d) IAS 8
Answer: c

These questions, based on the content you provided, cover various aspects of the IFRS standards
effective in 2023 and beyond.